Clinton Would Raise Taxes On The Wealthy. Here's What You Need To KnowThe Democrat's latest proposal would raise rates on the very (very) richest Americans and raise revenue, but it would further complicate the tax system and could be a minor drag on the economy.

Hillary Clinton wants you to know she has a new tax proposal. She also wants you to know that Bernie Sanders does not.

Late Tuesday, Clinton released a plan aimed squarely at a specific subset of Americans: that is, the very rich. She also went on the attack against Sanders, who has yet to release his tax plan (and who has also spent his political career taking aim at the richest Americans).

The Sanders camp says its plan is coming before the Iowa caucuses on Feb. 1, at which point there will be comparisons aplenty between the ideas of the self-styled Democratic Socialist senator and the former secretary of state with a reputation for methodical pragmatism. (Which plan is more populist? Who raises more revenue?)

Until then, here's what you need to know about Clinton's new plan.

What's in the plan?

Clinton's plan has four major parts to it:

A 4 percent surtax (the campaign calls it a "Fair Share Surcharge"), which has been getting the most attention. It involves taxing all income (that is, not just wage and salary income) over $5 million. That's what makes it a surcharge and not just the creation of a new income-tax bracket.

The Buffett Rule — She would require people earning more than $1 million annually to pay at least a 30 percent tax rate.

Tightening loopholes that tend to be used by the wealthy. In particular, the Clinton camp points to what's been dubbed the "Romney loophole." That refers to the practice of stashing millions of dollars in IRAs. They also highlight the "Bermuda reinsurance loophole," which has allowed some hedge-fund managers reduce their taxes via insurance companies in Bermuda, as Bloomberg reported.

Expanding the estate tax's reach — Right now, the tax applies to estates worth more than roughly $5.5 million. She would take that threshold down to $3.5 million, where the level was in 2009 (but higher than the $2 million level that existed throughout the mid-2000s) and also raise the rate from the current 40 percent to 45, as the Wall Street Journal writes.

To be clear, this isn't a full tax plan in the same vein as the ones many Republican candidates released. While GOP candidates like Jeb Bush and Marco Rubio released more comprehensive plans covering things like estate, corporate, capital gains and income taxes at once, Clinton has released her ideas in pieces. For example, she also released a corporate tax plan in December and a capital gains plan in July.

Whom would this new proposal affect?

Probably not you.

That's because the elements in this plan focus on either the richest sliver of Americans making more than $5 million, the wealthy people taking advantage of specific tax breaks, or the relatively few people earning $1 million or more.

The surcharge, firstly, would affect very, very few people. In 2013, about 34,000 tax returns out of 147 million (or about 0.02 percent) had an adjusted gross income of $5 million or more, per IRS statistics.

Likewise, Clinton's proposal says the estate tax expansion would affect 4 out of every 1,000 estates. And the Romney loophole would similarly be limited in scope — as of 2011, 98.5 percent of taxpayers with IRAs had balances of less than $1 million, as The Washington Post reported.

In addition, only about 346,000 returns listed incomes of $1 million or more in 2013 — about 0.2 percent of returns.

So it won't affect most people's lives, and that's kind of the point. Clinton's plan over and over stresses that it's aimed at the richest people, and it also provides numbers showing how limited the number affected will be.

The underlying message is honed for the age of Piketty (as well as Clinton's campaign against a populist opponent to her left). It sharpens the divide between the struggling American with stagnating income and the small number of people who are amassing more and more wealth.

Would these be big tax hikes?

The 4 percent surtax would be on top of the current top marginal tax rate of 39.6 percent (so, 10 percent higher) and on top of the total 23.8 percent paid on long-term capital gains right now (so, nearly 17 percent higher).

From that perspective, those seem like sizable bumps, but in historical perspective, the rates still would be modest. Tax rates are much lower in these two areas than they have been in the past. Consider that in 1981, Ronald Reagan cut taxes from 70 percent to 50 percent, as Roberton Williams, fellow at the Tax Policy Center (a project of the left-leaning Brookings Institution and Urban Institute), tells NPR. (Meanwhile, this proposal would essentially raise the top marginal rate to nearly 44 percent.) Capital gains rates were also in the 30s in the 1970s.

Moreover, it's well below the top marginal rates proposed by economists Thomas Piketty and Emmanuel Saez, who are famous for their work on inequality, as The Washington Post's Jim Tankersley pointed out this week. They said the top rate could be as high as 83 percent, Tankersley writes.

None of which is to say what an optimal rate looks like. Rather, it's to say that what makes a tax hike look big or small is all relative.

What's the price tag?

The two places that put out the most widely circulated numbers on candidate tax plans — the Tax Policy Center and the Tax Foundation — have yet to score this proposal. For its part, the Clinton camp says this plan will raise up to $500 billion in revenue over 10 years.

That's encouraging to Marc Goldwein, senior vice president and senior policy director of the Committee for a Responsible Federal Budget, a Washington, D.C., organization that pushes for tighter fiscal policy. But what's important to him is what Clinton will do with that half-trillion dollars.

"So far, Secretary Clinton wants to raise revenue," he said, "and we know she wants to use some of that new revenue for new spending. I don't know how much she wants to use on deficit reduction."

Indeed, Clinton has said that making the wealthy "pay their fair share" is how she will pay for her paid-leave plan, released last week.

In comparison, Republican tax plans (which are, again, more comprehensive than this proposal) largely look like they'd grow the deficit, in many cases by trillions of dollars. But just as Clinton's plan doesn't explain exactly how the new revenue would be spent, it's unclear exactly how those Republicans' spending cuts would make up for the lower revenues.

What would it do to the economy?

The plan could reduce economic growth because it could cause wealthy Americans to invest less, says Kyle Pomerleau, director of federal projects at the right-leaning Tax Foundation. However, he said it would only be a "minor" reduction to output.

Williams believes there won't be any effects for a couple of reasons. He pointed to a paper from the Brookings Institution's William Gale, which found a weak relationship between tax changes and growth. He also said that wealthy Americans have been sitting on their cash lately (meaning new taxes wouldn't reduce already-low investment levels, though if that changes, so could the effect of these taxes).

Why a surtax?

Clinton says the tax is to make sure the richest people pay higher tax rates than "middle-class families." The campaign points to IRS data showing that the top 400 taxpayers, who had an average income of more than $260 million in 2013, also paid an effective income tax rate of 23 percent that year.

But it also is yet another function for the tax code to perform. Tax code simplification is an obsession of Republican candidates this year, and President Obama has also promoted the idea. It's debatable whether simplification is always good. But Williams argues that Clinton's plan is needlessly complex.

"It's a further complication to an already complicated tax system," Williams said. "If we don't like the way the tax system collects money from people, change how the tax system works."

"Why not go for 100,000 people or 200,000 people and not 40,000 people?" he said (rounding up from the roughly 34,000 who earned over $5 million in 2013). "Sometimes tax rules are picked because they have a revenue target. This doesn't seem to be the case. This seems to be the case of, you have a nice round number; it has an emotional appeal."

Would it pass Congress?

It would be tough. Even if Clinton wins the presidency and, with her, Democrats sweep into the Senate, they have little chance of winning a filibuster-proof majority. Not only that, but the House will likely remain Republican.